Mortgage Loan Rates at 16-Month Low on 30-Year Loans

April 13, 2016 by Paul Ausick

The Mortgage Bankers Association (MBA) released its report on mortgage applications Wednesday morning, noting a week-over-week increase of 10% in the group’s seasonally adjusted composite index for the week ending April 8. Mortgage loan rates decreased on three loan types last week and remained unchanged on two others.

On an unadjusted basis, the composite index also increased by 10% week over week. The seasonally adjusted purchase index increased by 8% compared with the week ended April 1, its highest level since last October. The unadjusted purchase index increased by 9% for the week and is now 24% higher year over year.

The MBA’s refinance index increased by 11% week over week, and the percentage of all new applications that were seeking refinancing rose from 54.5% to 54.9%.

Adjustable rate mortgage loans accounted for 5% of all applications, up 0.3 points from the previous week.

The MBA’s chief economist, Mike Fratantoni, said:

Helped by a persistently strong job market and low rates, applications for both conventional and government home purchase loans increased last week. The purchase index was at its second highest level since May 2010. Applications to refinance also increased as the 30 year contract rate decreased to its lowest level since January 2015.

According to the MBA, last week’s average mortgage loan rate for a conforming 30-year fixed-rate mortgage decreased from 3.86% to 3.82%. The rate for a jumbo 30-year fixed-rate mortgage decreased from 3.76% to 3.74%. The average interest rate for a 15-year fixed-rate mortgage remained unchanged at 3.10%.

The contract interest rate for a 5/1 adjustable rate mortgage loan also remained unchanged at 2.94%. Rates on a 30-year FHA-backed fixed-rate loan fell from 3.73% to 3.66%.